The Fed Keeps Adapting

“Jay Powell, the chair of the Federal Reserve, announced a major change to monetary policy on Thursday, adding to what has become a remarkable period of activism in light of unprecedented economic conditions. In a widely anticipated move, Chair Powell announced that the Fed would no longer preemptively employ interest rate hikes in order to prevent future increases in inflation beyond its 2% bogey. Instead, it will wait for concrete evidence of price increases before taking action. The Fed chair also indicated that the institution would adjust its assessment of maximum employment to permit jobs growth to reach more workers. In the span of one speech, Powell introduced meaningful changes to how the Fed would seek to accomplish its “dual mandate” of price stability and full employment.” Continue reading.

Source: Neuberger Berman
6-minute read.